Administrative Services Organization (ASO)
An arrangement in which an insurer or third party handles claims processing, provider networks, and administration for a self-funded employer plan, while the employer bears the actual cost of medical claims.
What is an Administrative Services Organization (ASO)?
An Administrative Services Organization (ASO) is an arrangement in which an insurer or third-party administrator handles the operational side of a health plan, such as processing claims, providing access to a provider network, and managing day-to-day administration. Crucially, the administrator performs these functions without bearing the insurance risk.
These arrangements are most common with self-funded employer plans, where the employer pays for its members' actual medical claims out of its own funds. The ASO provides the infrastructure and expertise to run the plan, while the financial responsibility for claims stays with the employer.
Why do Administrative Services Organizations matter?
ASO arrangements let self-funded employers tap the administrative capabilities and provider networks of an established insurer without buying fully insured coverage. This gives the employer more control over plan design and cost, since it retains the claims risk rather than transferring it to an insurer.
For providers and revenue-cycle teams, recognizing that a plan is administered under an ASO helps explain how claims flow and who ultimately funds payment. The administrator handles adjudication and remittance, but the underlying dollars come from the self-funded employer's own resources.
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